Dow Jones futures open Sunday night, along with S&P 500 futures and Nasdaq futures. The recovering stock market had a generally positive week, with Nasdaq and small caps leading the way.
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But with the major indexes at resistance after recent strong gains, the bulls suggest a potential for recovery amid some mixed headlines.
Stocks to watch
Chip stocks are rebounding, a positive sign for any market rally. Monolithic electrical system (MPWR), KLA (KLAC), Analog Devices (ADI), Accelis Technologies (ACLS) and Onsemi (ABOVE) is growing, but currently uninhabited, expanded from the original but below traditional entries buy points.
Apple (AAPL) is probably still in an early entry range, but investors may want to wait and see if AAPL stock can make a stop.
Tesla stock sold off on Friday, but the EV giant needs a break. Meanwhile, the California DMV alleges Tesla (TSLA) of false advertising promoting Autonomous Driving and Full Self-Driving.
Final, Poison (CELH) was tested for heat after a huge increase in recent days and weeks. What Should Investors Do With CELH Stocks Earning Tuesdays?
MPWR stock is on IBD Long-Term Leaders. KLAC stock is on the Long Term Leader watchlist. Shares of CELH, Axcelis Technology, Onsemi, KLA and Monolithic Power are all available on IBD 50. Shares of ADI, Onsemi and Monolithic Source are available on IBD Big Cap 20. ACLS Stock is Friday’s IBD Stock. Monolithic Power and ON stocks were Stock Of The Day at the beginning of the week.
The video embedded in this article discussed market action and analysis Vertex Pharmaceuticals (VRTX), EQT (EQT) and ACLS shares.
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Berkshire Earnings
Berkshire Hathaway (BRKB) operating income rose 39% from a year earlier to $9.28 billion. But Warren Buffett’s conglomerate suffered a net loss of $43.8 billion. That reflects an investment loss of $53 billion, amid a stock market plunge that bottomed out in June.
Berkshire bought back just $1 billion of its own stock in the second quarter, down from $3.2 billion in the first quarter. Instead, Berkshire uploaded Mysterious Oil (OXY).
Buffett’s company still had $105.4 billion in cash left at the end of June compared with $106.3 billion at the end of March.
BRKB stock fell 2.8% last week to 292.07, trading between the 200-day and 50-day lines. Berkshire stock has rebounded from its June low but remains at its late-March high of 362.10.
Dow Jones Futures Today
Dow Jones futures open at 6 p.m. ET on Sunday, along with S&P 500 futures and Nasdaq 100 futures.
Remember that action overnight in Dow futures contract and elsewhere it doesn’t necessarily translate into actual trading the next week stock market meeting.
Join IBD experts as they analyze stocks that could act in the stock market rally on IBD Live
Rally stock market
The Dow Jones Industrial Average fell 0.1% last week stock market trading. The S&P 500 index rose 0.4 percent. The Nasdaq Composite Index rose 2.15%. The small-cap Russell 2000 gained 1.9%.
The 10-year Treasury yield rose 20 basis points to 2.84%, including 16 basis points the following Friday. hot job report. The Fed rate hike of 75 basis points on September 21 rose to two-thirds from about 40% ahead of the jobs data.
US crude futures fell 9.7% for the week to $89.01 a barrel, hitting the lowest level since before Russia invaded Ukraine in late February.
Among the Best ETFsThe Innovator IBD 50 ETF (FFTY) rose 2.9% last week, while the Innovator IBD Breakthrough Opportunity ETF (BOUT) decreased by 0.7%. iShares Expanded Technology-Software Sector ETF (IGV) increased by 3.7%. VanEck Vectors Semiconductor ETF (SMH) increased by 2.7%.
SPDR S&P Metals & Mining ETF (XME) rose 0.5% last week. The United States X Global Infrastructure Development Fund (SAVE) increased 0.15%. US Global Jets ETF (JETS) increased to 3.2%. SPDR S&P Homebuilders ETF (XHB) is 0.2% higher, the seventh consecutive weekly gain. SPDR Select Energy ETF (XLE) fell 6.8% and the SPDR ETF ETF (XLF) embedded 0.1%. SPDR Fund for the Healthcare Sector (XLV) fell 0.7%, despite strengths in biotechnology.
Reflecting a more speculative narrative on stocks, the ARK Innovation ETF (ARKK) rose nearly 11% last week and the ARK Genomics ETF (ARKG) 10.5%. Tesla stock remains a large stock in Ark Invest ETFs.
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Chip stocks
Monolithic Power stock jumped nearly 15% to 532.33 last week on strong earnings. Perhaps investors could have bought MPWR stock around the August 2 earnings differential, as it cleared some other resistance areas. But as of Friday’s close, Monolith stock was 17% above the 200-day line and 24% above the 50-day line. The relative strength line has been high, signaling the performance of MPWR stock relative to the S&P 500. The stock has a 580.10 buy point from the consolidation in late November, but ideally, the shares should pause. and form a control loop. That should provide a lower entry as well as let the moving averages catch up some ground.
It’s a similar story for Axcelis, Onsemi and KLAC stocks, which all reported earnings for the past two weeks and are now extending from moving averages but below traditional breakout levels. The same goes for ADI stock, though Analog Devices earnings is on Aug. 17.
Apple stock
Apple shares rose 1.75% to 165.35, the fifth straight gain for the week. Investors may have bought AAPL stock because it removed the 200-day limit on July 29 after earnings. At 3.7% above the 200-day line, it is still considered to be actionable as an early entry. The RS line for Apple stock is already at a high. The official buy point is 183.04, but a handle, at current levels or slightly higher, would be appealing.
Tesla shares
Tesla shares fell 6.6% to 864.51 on Friday, down 3% for the week as it erased much of a seven-day winning streak. That also pushed the stock back below the 200-day line. But if TSLA stock can hold out for a few days around current levels, a break above Thursday’s high of 940.82 could offer a positive entry. It would be too low for a traditional grip.
At Tesla’s annual meeting on Thursday night, shareholders approved a 3-for-1 stock split, a long-awaited move. The actual split will take place on August 5. At the annual meeting, CEO Elon Musk talked at length about Tesla’s prospects, but didn’t say anything dramatic. Elon Musk’s ongoing Twitter saga may be weighing on TSLA stock.
Legal experts say Twitter (TWTR) has a strong case that Musk should go ahead with his $54.20-a-share takeover. The Musk-Twitter test will take place in October. Amid the latest regulatory filings, TWTR stock jumped 3.6% to 42.52 on Friday, reclaiming its 200-day line and hitting its best level in nearly three months.
Meanwhile, the California Department of Motor Vehicles on Wednesday accused the EV giant of misleading customers about the capabilities of Autopilot and FSD, according to a filing first reported by the Los Angeles Times. But if the state’s DMV wins, it will simply ask Tesla to modify its advertising and marketing.
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Stocks
Shares of Celsius have been in a steep decline since it crossed the 200-day threshold on July 5. News broke on August 1 that PepsiCo (PEP) is holding a large share of CELH and will be the main distributor for the energy drink maker.
On Friday, CELH stock fell 9% to 98.62, although it bounced off the 10-day line and is still up nearly 11% for the week. Celsius will rise from the small-cap S&P 600 to the S&P MidCap 400. But fewer mutual funds and ETFs track mid-cap funds than the S&P 600, so as a result there will be fewer index funds that can own shares. more CELH votes. Also, energy drink leader Monster Beverage (MNST) fell 5% on Friday due to weak earnings.
Celsius earnings are due on Tuesday, so investors have to make a decision. If you buy CELH stock near the 200-day threshold or the resistance around 72, you still have plenty of room left. You can choose to lock in a portion of the profits. For those who have purchased renewals, say in the Pepsi news on Monday, you may have little chance or are sitting at a loss for results. Celsius shares tend to have a big impact on earnings.
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Market aggregation analysis
It’s been a mixed week for the stock market rally. Growth and small-cap stocks led the way, while the Dow Jones and S&P 500 were little changed
But with rising earnings and a red-hot jobs report signaling big Fed rate hikes for longer, the market rally may have sold off last weekend after the stock rises to the resistance level. But they did pause, at most. Friday’s action in particular is encouraging.
Nasdaq is above its peak in early June, but is heading towards the trendline starting at the beginning of the year. The Russell 2000 is right at its early-June high while the S&P 500 and Dow Jones are still performing at that key level.
Longer pauses or modest pullbacks are healthy. The market rally has come a long way, with most of the gains coming in relatively light volume.
In the meantime, many top stocks or potential leaders can take a breather. A pause or a pullback in the major indexes will give the likes of Monolithic Strength and Onsemi forging the handle, making lower entries and letting the moving averages catch up.
The same goes for shares of Apple, Tesla, and many others.
The market leadership position is expanding. Biotech, chips, aerospace/defence, solar, steel and energy, just to name a few, are showing strength.
These are good signs. But this could still be a bear market rally that eventually dries up.
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What to do now
Investors should play this market, but not for all marbles. There are still reasons to be cautious about the current market. At any given time, not many stocks are giving out buy signals, while industry tremors and rotation can make holding positions difficult.
So add exposure carefully. There is still a controversy about the partial profit.
Build your watch list. Make sure to create a wide network so you can spot potential leaders from a variety of fields.
Read Big picture every day to stay in sync with market trends and top stocks and sectors.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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